IMF Cannot Yet Predict Terms of Next Tranches for Ukraine

Discussions on the first review of the Stand-By Arrangement for Ukraine are still ongoing and a number of issues remain unsolved, so it is still difficult to predict when the negotiations will be completed. It will depend on the progress in discussions on the terms and conditions set out in the arrangement.

“At this stage, it is not possible to make any predictions about when the review can be completed. This depends on how quickly there is progress on outstanding issues,” IMF Resident Representative in Ukraine Goesta Ljungman said.

Ljungman pointed out the importance of maintaining the reforms carried out by the National Bank of Ukraine (NBU) and progress in strengthening the NBU to protect it from excessive external pressure, a clear plan to reduce the fiscal deficit, abandon control over gas prices and address the country’s long-term electricity model, as well as adhere to the principle of integrity of anti-corruption bodies and the judiciary.

He also stated that the IMF wanted to support Ukraine’s economic development and prosperity.

“We have demonstrated this through a series of IMF-supported programs continuously since early 2014. And we will continue to support good economic policy and the transformation of the economy,” the IMF Resident Representative in Ukraine said.

On 13 February, Ljungman announced the completion of work of the IMF mission, which had operated since the end of last year, on the first review of the Stand-By Arrangement giving no recommendation on the second tranche and emphasising a need for additional discussions and greater progress on part of Ukraine.

According to Ukrainian media reports, the problematic issues include, in particular, the adoption of the law on the High Council of Justice and the removal of IMF concerns about interference in the work of the National Anti-Corruption Bureau of Ukraine and the Specialised Anti-Corruption Prosecutor’s Office. A positive result also requires the adoption of new amendments to the law on the National Bank and banks and the refusal to limit prices introduced in the energy market this winter, as well as greater clarity on budget plans for 2022 and the audit of the COVID-19 fund.

Bohdan Marusyak